HDFC rallies 5% on buzz in isuranace biz; EPFO meet

MUMBAI: Shares of HDFC, a housing finance company, surged closed nearly 5 per cent up in trade as sentiment turned positive following reports that Standard Life plans to hike stake in its insurance arm HDFC Standard Life Insurance to 33 per cent from the current 26 per cent.

Meanwhile, there are reports that Employees' Provident Fund Organisation may deploy 15 per cent funds to housing finance companies to comply with PMO's suggestion to fund low cost housing in the country, also led to rally in the stock.

Deployment of 15 per cent funds would mean credit flow of nearly Rs 2.3 lakh crore to low cost housing. The EPFO is expected to meet on December 19 to consider hiking exposure to housing finance companies.

There also reports that HDFC is likely to make advance tax payment of Rs 735 crore for quarter ended December against Rs 650 crore in year-ago period.

“Housing finance as a whole is looking very interesting. In the last six months, they have outperformed the financials. HDFC underperformed (in that period) but now, it is coming back but I will not look at HDFC for investment from these levels,” said Neeraj Deewan, Director, Quantum Securities.

“As a portfolio, HDFC can be part of portfolio and can give you still decent returns from these levels but to get a good delta, I will still go for smaller ones in the housing finance basket,” Deewan added.

The stock ended at Rs 1123.10, up 4.94 per cent, on the BSE. It rallied 5.36 per cent to touch intraday high of Rs 1127.65